The real estate market tends to slow down at this time of year as people ready themselves for the holidays and the colder weather settles in. But while the market has slowed a bit when comparing November to October, activity is actually up when comparing November this year to November last year.
It looks like changes to mortgage qualification rules may be driving some extra activity right now as people look to get their real estate transactions completed before the January 1st cut-off.
These mortgage rules consist of a new stress test that is intended to ensure homeowners are prepared for future increases to interest rates. Even if you have 20% or more for a downpayment, you will need to qualify at a higher interest rate of 2% above the lender’s posted rate. This will effectively reduce your buying power by a whopping twenty percent! For example, if you currently qualify for a $700,000 mortgage, you would only be able to get a mortgage for $560,000 starting on January 1, 2018.
As you can imagine, this is a pretty big change that is forcing some homebuyers to speed up their purchasing plans. It can also increase the pain points caused by chain deals where deals are dependent on the sale of another home, so be sure to give our team a call for sound real estate guidance!
Real Estate Listings
The trend towards increased listings continues! There are more residential listings coming on the market, particularly for single-family homes.
Monthly Listings by Price – November 2017
New Residential Listings
Residential listings are up 11.75%, from 485 in November 2016 to 542 in November 2017.
New listings for single-family homes have risen from 223 in November 2016 to 270 last month, an increase of 21%.
Active Residential Listings
Residential inventory is up, climbing 9.25% from 1,416 homes last year to 1,547 this year. Single-family homes have seen a particularly strong increase and you can read more about that in the Real Estate Inventory section below.
Real Estate Sales
With new mortgage rules coming into effect on January 1, we are seeing a flurry of activity in real estate right now. While all residential sales are up a modest 3.97%, sales for single-family homes rose 17.39% as people hurry to get settled into their new home by the end of the year. We wouldn’t be surprised to see this trend continue into December, despite the holiday season that typically results in a near freeze on real estate transactions.
Residential Property Sales
Residential home sales saw a modest increase in sales in November 2017, climbing 3.97% from 378 properties sold in November 2016 to 393 properties sold last month.
As mentioned above, the biggest climb was in single-family homes which saw a 17.39% increase in sales when comparing November 2016’s 161 sales to last month’s 189 sales.
Monthly Sales by Price – November 2017
Days On Market
Typically the cooler weather means more days on market as would-be buyers avoid closing on properties so near Christmas-time… Not so, this year! In fact, November’s number of days on market is pretty consistent with October at 55, which is a 9.35% decrease from an average of 61 days in November 2016.
Real Estate Inventory
Real estate inventory in the Central Okanagan is up once again; welcome news for buyers and those looking to transition to a new home! The biggest gains have been seen in single-family homes and though we are still in need of listings at the lower priced end of the market, we are starting to see some small increases in the number of listings priced below $600,000.
3-Year Inventory of Active Single-Family Residential
In November 2016, there were a total of 1,416 residential properties on the market, including everything from acreages to condos. This year, that number had climbed 9.25% to 1,547 available properties. Of these, 820 were single-family homes (including waterfront) and that represents a huge increase of 29.5% as compared to the 633 available homes in November 2016.
|Property Type||Nov. 2017||Nov. 2016||Percentage Difference|
|All Residential Properties||1,547||1,416||9.25%|
|Waterfront Single-Family Homes||61||44||38.64%|
|All Single-Family Homes||820||633||29.5%|
Kelowna Real Estate Prices
The average home price in the Kelowna area is up 7.44% from $504,388 in November 2016 to $541,902 in November 2017, including condos and townhomes.
With Canada’s mortgage changes looming ever-closer, we’re seeing some interesting things happening in the Kelowna real estate market. Some homeowners are dropping prices or are more amenable to negotiating as they rush to seal the deal so that they can move on to their next home before January 1st. If you are able to put in an offer with few conditions, such as pending sale of your current home, you might be able to find a bargain despite the competitive market.
Single Family Residential Average Prices
Average List Price
The average price of a single-family home in November was $674,598 which is a 10.49% increase over the same period last year when homes were listed for an average price of $610,573.
If you’re rushing to beat the mortgage clock, you will want to work with a qualified and dedicated Kelowna Realtor who can help you navigate the domino effect that’s being amplified over the coming weeks. Remember that the price you see on a home isn’t necessarily what that home will sell for. There are always homes that have been listed too high or that have been sitting on the market for a while. These homes can be a great opportunity for you and a Realtor with strong negotiating skills can help you get the best possible deal.
For people looking to sell a home in Kelowna, our team is dedicated to doing the research and ensuring that your home is well-priced, ensuring strong interest and a healthy selling price. A well-priced home will often receive multiple showings and offers within a week or two, particularly for homes priced at about $650,000 and under where competition is particularly fierce.
And finally, check out our handy infographic for an overview of some of the major numbers for November 2016 versus November 2017:
*Unless otherwise noted, all stats are for Nov 2017 compared to Nov 2016 and cover the Central Okanagan region. Statistics are provided by the Okanagan Mainline Real Estate Board.